Buying Our First RV - Private Sale Question

[mamashoneybees]

Hi! We are looking to buy our first RV, having only rented before and are really excited. We found one we really like but it is a private sale with a lien still on it. We have cash all lined up and are ready to take a trip this August before kids head back to school. The owner seems willing to work with us but when he pays off loan the title is supposed to take 30 days to get to us. In this time I don't believe from reading DMV rules that we can be driving it, nor will we be able to insure it. Has anyone ever been in this situation where you just had to wait for title and hang tight on any trips, is there a better process we do not know about?

 

[Boat Addict]

You will need to work things out that you go directly to the lien holder, if local and handle the payoff and bill of sale directly with the seller. You will need to make sure the lien is paid off before taking delivery and end up with a potential nightmare at the worse case.

 

[mamashoneybees]

Thanks - I needed someone else's thoughts on it. We have tried calling the DMV but because of COVID we have just waited on hold all day and then get hung up on saying they are unable to take our call today. We are just getting a cashier's check from our bank but still know it could take a few weeks for title and didn't know what to do in mean time. Owner offered to rent for us for a month until lien was paid off and then subtract from purchase price. I just wasn't sure about this.

 

[Boat Addict]

I personally would not do that. First off I don't think you can be driving it when you are not on the insurance policy and the camper is not in your name.  And technically I don't think he can rent it either. You will probably be liable for the entire value of the camper out of pocket if you end up with a wreck too.But I would not give the owner one cashiers check made out to him or her. 

I will add that even if you get two checks, the payoff can change for the loan if its not paid off by a certain time when you get a payoff on most any loan. And you surely cannot get insurance and tags on your own unless there is a transfer of the camper with an application for title from most states.  And this is normally done by the DMV with a clear title or a power of attorney and paperwork handled  at an rv licensed dealer if you buy one from that type of outlet.

 

[jayc2640]

We bought our first coach on a private sale.  First, we were illegal by using the previous owner's tags to drive the rig from Virginia to Ohio.  Then, Virginia required them to turn the tags in after the sale.  We mailed the tags to them.  Our finance company took too long (legally they have to provide title within 30 days).  Finally, my wife actually found the CEO's number online, and called it.  He answered!  She raised hell, and within a day everything was resolved.  So, my advice is to get this resolved before you buy.

 

[84southwind]

If there is a lien on it, contact the lien holder and get an exact total to pay the loan out in full on a certain date, get your finance company to issue a cheque payable to the lien holder in that amount and then a cheque to the owner for the balance, take the seller to the lien holder, give them the cheque in return for a clean title in your name, also get a bill of sale from the owner at the same time but make sure you have a clean title in your hand before you give a final payment to the owner. If you don't pay off the lien holder but give everything to the owner he could pocket the money and have the lien holder show up at your door demanding payment or the unit.

 

[Tom55555]

This might help.

https://www.jdpower.com/cars/shopping-guides/how-to-sign-over-a-car-title#:~:text=Signing%20Over%20a%20Car%20Title&text=The%20buyer%20then%20takes%20the,mailed%20within%20a%20few%20weeks.

 

[SpencerPJ]

I once bought a car like you are possibly doing.  Very stressful time.  You have to pay seller so they can pay off loan.  We did it at their bank, but now with this covid stuff, who knows that process.  Then, it seems all titles are at some magic place, I think CA. It took 3 weeks to get title, because they send it to bank, bank to original owner, original owner to us.  I swore to myself I'd never do that again.

 

[Gary RV_Wizard]

Florida (for example) processes the title change within 2 business days of receiving the release of lien, but the lendor is allowed 30 days to do the release. Most lenders do it in 3-5 business days, but there is no sense or urgency on their end. It's just routine business for their clerks and they do it their way, no matter what you say or do.

You and the seller need to discuss the payoff and the procedure for clearing the lien and delivering the title with the lender - the timing and methods can vary a lot. In some states the lendor physically holds the paper title while in others he has a lien document (possibly electronic) that is registered with the DMV. You need to work with whatever the state and the lender do.

YOU should make your check payable to both the lender and the owner so that you are assured the loan is actually paid off. You can write one check for the total and let them sort it out, or write two checks, one to lender & owner for the loan payoff amount and the other for the balance to the owner alone. Most buyers just do one check.

You get a signed (and maybe notorized) bill of sale from the seller to legally cover the time between payment and receipt of the title. The bill of sale should state a timeframe for the seller to deliver a "clean" title to you.  You should be able to insure the motorhome at that time - the insurer is not going to demand to see the title.

 

[Isaac-1]

This is a very hard question to answer without knowing which state or states are involved, as different states handle titles and registration differently.

 

[TheBar]

I bought my current RV in another state so you need to know the laws in both states.

When I am the seller I now insist on signing the title over at the DMV. A guy bought my car and never transferred the title to his name. 4 months later the car was in a hit and run accident. The notary was able to verify the sale or I could have been charged with hit and run, damages to the other vehicle and driver, plus $4k in impound charges.

 

[Chakara]

Here in NM a Bill of Sale is enough to get you out of trouble with the law.  As long as you have your desired insurance I'd call it go and travel.

 

[Gary RV_Wizard]

The handling of a lien is a complication but it's a very normal situation that occurs daily in vehicle transactions everywhere. You have to be cautious to make sure all the i's get dotted in a timely fashion, but it's not really a big deal if you are working thru a reputable lender. If in doubt about the seller's integrity, you can use an escrow company to hold the funds and receive the title.

 

[Isaac-1]

Also keep in mind that if this is a local bank that does not specialize in vehicle loans, that they may not often deal with financing private party sales of vehicles.      I know when I went through the process with my local bank about 4 years ago, it seems they were much more geared towards financing vehicles that were being sold by dealerships, than private individuals.

 

[Gary RV_Wizard]

True, Isaac-1, but mommashoneybees isn't borrowing from a bank - they are merely need to make sure the seller's bank gets paid and releases the title lien. That's the seller's responsibility, of course, but the buyer is the one who suffers if this isn't handled cleanly and promptly.

 

[mrschwarz]

Can the buyer pay the lienholder directly? That way, you can pay the owner for his equity and don't have to 'trust' him to pay off the loan. I have no experience with this, but it's just a thought.

 

[TheBar]

When I bought my current RV the seller and I went to his bank and explained I was going to pay off his loan. My bank had a branch next door so I went to my bank and got a cashiers check made out to his bank. I handed his bank the check and they signed over and notarized the title over to me. He did have some equity which they deposited in his account.

 

[John From Detroit]

Your millage may vary... (State laws vary from state to state)
In theory there are two or three ways this can be done
ONE: you and the seller pay a visit to the leinholder.. One of you hands a wad of cash to the lein holder and a "Discharge of Lein" letter is ececuted and DMV is notified by the home office. In some cases this happens before you are out the door (make sure you leave letter in hand)

IN other states it's more complicated.

Check with your DMV.  Believe it or not what makes it legal is registration and they may be willing to issue provided you bring in the discharge of lein paperwork along with the application for new title.  or they may issue temp documents.    But since I don't work for DMV (I worked for License Plate Manufactur Recuriting (told cops where to go for a living) and I'm gussing you are not in Michigan (only a 2% chance)  the only "Advice" is this

1: have a mobile on-site RV service type do a complete inspection. Expect to pay a few hours labor.
2: Check with the folks who know .in this case DMV NOTE: managers are not always the smartest person in the room (Once had to show the manager how to run my own registration plate.. What can i say. Dispatchers well trained. managers ... Not so much )

 

[Gary RV_Wizard]

Can the buyer pay the lienholder directly? That way, you can pay the owner for his equity and don't have to 'trust' him to pay off the loan. I have no experience with this, but it's just a thought.

The recommended method is for the buyer to provide a check payable to the seller & the lender jointly.  That way the payment has to be handled by thru the lender and the money cannot go astray.

 

[Boat Addict]

In a private sale before tying up my money  I personally want to know the amount of lien and want to speak directly with the lien holder and that it gets paid off in a timely manner. Because in my state you cannot get a tag to drive it with just a bill of sale from a private owner. And if I put anything on my insurance the item has to be in my name with an application for title submitted for a new one in case something happens..

Of course this is different from buying something from a licensed dealer. They process the paperwork and gives you the temporary tag as a representative for the tag agency.